Ebrahim Ochieng Othuon & 2 Others v Chemilil Sugar Co. Ltd [2014] KEELRC 957 (KLR)
The bottom line
#A Kenyan court ordered an employer to pay 48 workers house allowance for their entire employment history, not just three years.
What this practically means
#Executive summary
#Key legal issues
#Entitlement to house allowance under Section 31 of the Employment Act, 2007
The claimants are entitled to house allowance because their contracts did not consolidate a housing element into the basic wage
Section 31 obliges an employer to provide housing or pay a sufficing rent sum, save where the contract consolidates a housing element into basic pay. The court found the claimants' contracts contained no such consolidation, so the statutory entitlement stands and each claimant is entitled to payment of house allowance.
Period over which house allowance is computed
House allowance is payable at 15% for each month for all the time the claimants worked, not limited to the respondent's three-year record period
The respondent argued the claim should be limited to the three years for which an employer must keep records under the Employment Act. The court rejected this because the respondent's own omission to pay house allowance occasioned the litigation, and terminal dues are ordinarily calculated on all years worked.
Legal principles established
#- An employer must under Section 31 of the Employment Act either provide reasonable housing or pay a house allowance, unless the contract of service consolidates a housing element into the basic wage
- House allowance is conventionally computed at 15% of the employee's salary or wage
- Where the employer's omission to pay house allowance is the subject of adjudication, the employer cannot rely on the three-year record-keeping limitation to restrict the claim; terminal dues are computed on all years worked
Court orders
#- 1.The claimants be paid house allowance at 15% of salary for each month for all the time they worked, as per the schedule prepared by the claimants and filed in court on 25.3.2014, totalling Kshs. 5,896,617.48
- 2.Costs be borne by the respondents
- Jurisdiction invoked
- Jurisdiction arising from the consent recorded and endorsed by the court on 28.2.2014 in the employment cause, with the issue of house allowance reserved for court determination
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Ebrahim Ochieng Othuon & 2 Others v Chemilil Sugar Co. Ltd [2014] KEELRC 957 (KLR)", Case Analysis (2014). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2014/957/eng@2014-04-30
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.